To Chase New Clients or Tap Into Existing Ones?
You may be seeking new business to grow your company… but there may be an opportunity for growth right under your nose.
The 80/20 rule applies to many, many things in business. One is that 80% of your business comes from 20% of your clients — so what does this mean for your future business?
Just like your existing business, your future business (read: profits) will also come from a small percentage of clients. But are those future profits going to come from the clients you already have, or the ones you have yet to secure?
Having worked closely with dozens of integrators big and small, I have consistently heard leadership teams call out the need for more business; more new clients, more revenue generation and more diversity in revenue sources.
And while all of these outcomes are ideal, what I don’t hear about nearly enough is more customer retention, more customer satisfaction and more business diversity with the clients already in house. Leaving me to ask two questions:
- Why so little talk about the current clientele?
- What are you thinking not doing more to grow the business you already have?
If I told you it was six times more expensive to acquire a new customer than it is to keep one you have, would you believe it? The research is in and it supports that data point. Turnover is very expensive!
Furthermore, for most small businesses, the best method of customer acquisition comes from the clients they already have. So when a client walks out the door, not only does the associated revenue vanish, so does the potential connections of a satisfied customer.
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Time and again I hear about big accounts changing hands from one integrator to another. This can certainly be a byproduct of another integrator knocking their socks off, but if the experience is anything like the one I know so well, the changeover took place at an inflection point.
You know, one of those moments where the integrator of record dropped the ball and the disappointed client started shopping around. Now, at some point this will happen to every business, but as a whole, the reason this most often happens is because the relationship between the integrator and the client was never cemented.
It was merely too transactional.
For any and all growing businesses, it is important that business development is a focus. But developing business needs to be both of the following things. It should be something that is done in addition to taking care of the customers you have.
Invest in resources to serve your clients before finding people to identify new ones. It can come from the clients you have. Meaning, do you truly believe that the clients you already have are doing all of the business they can with you?
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Ask yourself, how many of your current clients do you even consistently make time for when there isn’t an active project? If there aren’t regular meaningful touch points in between sales, then you are further perpetuating low-value sales relationships that will likely cost you down the line.
The more you secure the relationship between projects, the more likely some type of mistake can be overcome without customer attrition. In short, there is nothing wrong with aspiring to grow your business, but it should never come at the expense of the clients you already have.
If you are seeing too many clients exiting on a year-over-year basis, maybe more sales isn’t the answer; maybe the answer is more customer retention.
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